Jump to content
House Price Crash Forum
Sign in to follow this  
bubbleturbo

Long Term Gilt Yields Up 1% In Last 5 Months

Recommended Posts

Long term gilt yields, which mortgage rates depend on have gone up from 1.7% to 2.7% over the last 5 months.

UK 10 Year Gilt Yield %

I guess this is as a result of rising public debt levels and the approaching end (thank god) of record breaking low interest rates.

Edited by bubbleturbo

Share this post


Link to post
Share on other sites

What level of long-term gilt yields would force a rise in standard variable rates?

I don't think that will matter, there will be more printy printy to buy more uk government debt. Carney will not allow rates to rise up any more.....

Share this post


Link to post
Share on other sites

Long term gilt yields, which mortgage rates depend on have gone up from 1.7% to 2.7% over the last 5 months.

UK 10 Year Gilt Yield %

I guess this is as a result of rising public debt levels and the approaching end (thank god) of record breaking low interest rates.

Suggest you focus on 3% to 2.7% recently, for now

Share this post


Link to post
Share on other sites

I don't think that will matter, there will be more printy printy to buy more uk government debt. Carney will not allow rates to rise up any more.....

It's not up to Carney. Bernanke's been printing all year and US Treasury rates have gone up in a straight line. Carney would have to buy up the UK's entire debt issuance to get a better price. There'd be a sterling crisis before you could say knife.

Share this post


Link to post
Share on other sites

It's not up to Carney. Bernanke's been printing all year and US Treasury rates have gone up in a straight line. Carney would have to buy up the UK's entire debt issuance to get a better price. There'd be a sterling crisis before you could say knife.

Um, why "knife"?

Just thought I would ask what others are thinking.

Yep, Carney could try to do a Lamont but it would ultimately end in a Sterling crisis.

Share this post


Link to post
Share on other sites

It's not up to Carney. Bernanke's been printing all year and US Treasury rates have gone up in a straight line. Carney would have to buy up the UK's entire debt issuance to get a better price. There'd be a sterling crisis before you could say knife.

I disagree. In the medium term it is up to Carney and mainly Bernanke's replacement Yellen. Oh and I think the EU central bank might join in at some point!

Bernanke has been printing and the talk of 'tapering' spooked the markets and rates started to climb. So Bernanke bottled it, and rates have held steady as he's still monetizing debt at $85BN a month. He's now gone, but at some point super dove Yellen will up the ante and print at a higher amount to keep rates low.

There will at some point be either a currency crisis or the real recession which we never saw after 2008/9 when it was postponed will happen. I agree there, it's just a long way out on the horizon and we can't see it (yet!)

Share this post


Link to post
Share on other sites

Um, why "knife"?

Just thought I would ask what others are thinking.

Yep, Carney could try to do a Lamont but it would ultimately end in a Sterling crisis.

Something to do with catching a falling knife

Share this post


Link to post
Share on other sites

Personally I think the USA can carry on printing until the cows come home, america has a lot of economic power.

The uk on the other hand does not have the worlds reserve currency.

Share this post


Link to post
Share on other sites

I disagree. In the medium term it is up to Carney and mainly Bernanke's replacement Yellen. Oh and I think the EU central bank might join in at some point!

Bernanke has been printing and the talk of 'tapering' spooked the markets and rates started to climb. So Bernanke bottled it, and rates have held steady as he's still monetizing debt at $85BN a month. He's now gone, but at some point super dove Yellen will up the ante and print at a higher amount to keep rates low.

There will at some point be either a currency crisis or the real recession which we never saw after 2008/9 when it was postponed will happen. I agree there, it's just a long way out on the horizon and we can't see it (yet!)

Goldmans suggests another round of LTRO imminent from the ECB so I think you may be right there. How effective that's likely to be is another matter.

As for Bernanke's QE3? If it was intended to hold down the long end of the curve then it failed spectacularly. When QE3 was announced in September, 2012 the yield on the 10yr was ~1.6%. One year later it has nearly doubled. The debt ceiling charade has brought it in a little since then but I can't see it going much lower. The trend is established and the driving force behind that change isn't QE at all but the dollar in its role as global reserve currency. As the shadow banking system continues to contract so the volume of global trade that it once supported declines along with it (below), driving up the dollar and setting off currency/bond market crises all around the world. $2-3 trn is traded on forex markets every single day, Bernanke's $85bn/month is pretty trivial by comparison.

1321779237.jpg

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   210 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.